West Virginia Legislative Lookahead Highlights Future Fund

by Todd Bergstrom

From 2011 to 2012, West Virginia recorded the second largest increase in natural gas production of any state during that period (behind only Pennsylvania), with an increase of 37%. That boom doesn’t appear to be trending towards bust any time soon. According to the early release of the U.S. Energy Information Administration’s Annual Energy Outlook for 2014, electricity generation from natural gas will surpass coal by the year 2035.

With an eye towards the future, West Virginia’s leaders are looking for ways to prudently manage the economic assets derived from this thriving industry, in an attempt to mitigate the cyclical boom and bust nature of natural resource extraction.

At yesterday’s Legislative Lookahead in Charleston, WV, West Virginia Senate President Jeff Kessler and several industry professionals touted the proposed West Virginia Future Fund as a way to do just that. According to its website, the fund is similar to those created by other mineral extracting states (including Alaska, Montana, New Mexico, North Dakota, Utah, and Wyoming), and would be “created from a portion of natural resources severance taxes and will turn a one-time source of revenue into a permanent source of wealth for our state.” The income gained from the fund “will provide an ongoing stream of revenue to meet the challenges of the future and help build a more prosperous and secure economy.”

The common theme among the panelists at the Lookahead event – such a fund should have been created years ago. With the first day of the 2014 legislative session beginning on January 8, we shall see if there is similar enthusiasm for the idea when proposed to the full legislature.